February 15, 2012 / 11:06 AM / 5 years ago

UPDATE 2-Domino's Pizza UK boosted by online surge

3 Min Read

* Year pretax profit 43.6 mln stg vs forecast 42.2 mln

* Online sales rise by 43 percent

* Company hopes to accelerate UK expansion

* Shares up 0.5 percent

By Matt Scuffham

LONDON, Feb 15 (Reuters) - A surge in online pizza orders from Britons staying at home during the economic downturn lifted profits at Britain's biggest pizza delivery firm, Domino's Pizza UK & IRL Plc,.

The launch of mobile phone apps letting customers choose a pizza from their smartphones helped drive a 43 percent rise in orders over the internet last year. Those now account for 44 percent of total orders with some shops taking three-quarters online, the company said on Wednesday.

"The rise of e-commerce in our business has been breathtaking," said Chief Executive Lance Batchelor.

Domino's, which operates the British and Irish franchises of the global brand, said pretax profit, excluding start-up losses at its German business, rose 14.6 percent to 43.6 million pounds ($68.3 million) in the year to Dec. 25, 2011. That was above analyst estimates.

With Britain's economy stagnant at best and seen possibly dipping into recession, Domino's said it had also benefited from more people staying at home and treating themselves to take-away food rather than eating out at restaurants or pubs.

"Giving people a treat when the world is a bit grey is something we do extremely well," said Batchelor. "There's no doubt it's a very tough trading environment and we've seen no sign of an uplift yet."

Sales at shops open more than a year were up 3 percent last year. Sales rose 3.7 percent in the first seven weeks of this year. These were also lifted by the launch of products such as a more upmarket 'Gourmet' range, the company said.

Domino's opened 62 shops last year to bring the total to 726. Finance Director Lee Ginsberg told Reuters it would like to accelerate expansion from its target of 60 stores a year, but was held back by planning restrictions.

Domino's opened its first six stores in Germany last year and expects to add 12 this year. It believes the business could eventually become twice the size of its British operation.

The average forecast for Domino's pretax profit was 42.2 million pounds, according to Thomson Reuters I/B/E/S data.

Shares in Domino's, which have risen by 25 percent since November, were up 0.1 percent at 478 pence at 1100 GMT, valuing the business at about 780 million pounds.

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